Selling away the Boston 'brands'
THE BOSTON skyline looks the same. But it feels different -- colder, flatter, sadder. The soaring glass tower that houses 3,800 employees of John Hancock Financial Services still dominates the urban landscape. But the business and the people inside will be sold to Manulife Financial Corp. of Canada.
On paper, the initial outline of the deal is as promising for Boston as such a deal could be. In a statement to the media, Hancock stressed its commitment "to remain strong and rooted in the city of Boston." Jobs will be protected, up to a point. Manulife and Hancock have agreed to maintain their combined level of charitable giving for four years. Hancock will also continue its sponsorship of the Boston Marathon until 2018, with an option to renew.
But this deal goes forward with the understanding that the two merging companies are pledging to attain $255 million in cost savings over the next three years. Ultimately, costs are reduced by reducing employees, charitable giving, and noncore business and sponsorships. That is just one new workplace reality in the sleek Hancock Tower.
With this kind of ownership change comes many new realities. Power flows from money. Once money-making power shifts to another corporate venue, the flow changes, from the top down. It doesn't happen overnight. But it happens.
The link between past and present grows more tenuous. A new way of talking and thinking filters through the organization. The old stories and values are meaningful to an ever-shrinking pool of colleagues. Personality quirks that were tolerated, even encouraged, by the former regime are no longer valuable or even amusing. Corporate history, passed down from generation to generation almost like a family history, hits a dead end. The change signals more than a new chapter in the life of a corporation. It marks the beginning of a new book, a new way of dealing internally with employees and externally with the rest of corporate Boston.
None of this has anything to do with profitability or ability to compete, the underlying business reasons for any merger or acquisition. If everything goes according to plan, both are enhanced. That is partly because something else is lost -- an individualized, distinct way of doing business in and for a city. That once-valued commodity is very expendable in today's global economy. The irony is that the distinct and specific way of doing business created a marketable brand in the first place. Someone pays a lot of money to buy the brand, whether it is a newspaper or an insurance company, and then that someone decides to change everything about the organization that produced the brand that attracted them.
That is all down the road for John Hancock Financial Services. Right now the assessment is about whether this is a good deal for shareholders. Shareholders are oblivious to the corporate values of John Hancock that made it more than an insurance company that happened to be based in Boston. The new corporate owners may care to some degree, at least initially. But when Manulife head Dominic D'Alessandro ultimately thinks about answering to shareholders from his Toronto-based headquarters, how much will he really be thinking about summer jobs for Boston school kids or economic justice for striking Boston janitors?
Hancock's sale is the continuation of a trend in Boston. Ownership of banks, insurance companies, high-technology firms, utilities, media, and retailers is shifting elsewhere. The mayor and Chamber of Commerce will try to put the best face on this new corporate Boston, but the spatula-thin ranks of Boston-based corporations make it harder to raise money and consciousness for a range of causes -- including next summer's Democratic National Convention.
The sale of this 141-year old landmark company named after one of the country's Founding Fathers is the inevitable conclusion of a journey that began when Hancock executives took the company public in January 2000. In doing so they chose to answer to Wall Street. And Wall Street does not care anything at all about Boston's skyline -- how it looks or how cold, flat, or sad it may feel.
Joan Vennochi's e-mail address is email@example.com.
© Copyright 2003 Globe Newspaper Company.